DISH Proposes $25.5 Billion Merger With Sprint

The pay television leader submits an alternative proposal to the telecom provider’s board that includes both cash and stock.

DISH Network(NASDAQ:DISH) has presented what it deems a "superior alternative" to the board of Sprint(NYSE:S) to merge the two companies in a combined cash and stock deal valued at $25.5 billion, DISH announced today.

DISH is offering Sprint shareholders $17.3 billion in cash and $8.2 billion in DISH stock, based on DISH's closing price on Friday. Sprint shareholders would receive total value of $7 per share in the proposal meant to top Softbank's offer.

The merger offer from DISH is equal to $4.76 cash per share -- which it labels as an 18% premium over the implied $4.03-per-share offer of Japan-based Softbank for 70% of Sprint -- and 0.05953 DISH shares for each outstanding share of Sprint stock, which would be equal to a 32% equity position in the combined company. The entire deal, according to DISH, is 13% higher than Softbank's offer to Sprint shareholders.

Executive chairman of DISH, Charlie Ergen, said in a statement: "Sprint shareholders will benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined DISH/Sprint, which will benefit from a significantly enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal."

According to the announcement, a combined DISH/Sprint would result in approximately $11 billion in cost savings due to synergies between the two companies, and would be equal to a net present value of $37 billion.

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Tim has been writing professionally for several years after spending 18 years (Whew! Was it that long?)in both the retail and institutional side of the financial services industry. Tim resides in Portland, Oregon with his three children and the family dog.